How to Structure, Appraise and Value a Real Estate Mortgage Note

Five Key Factors that Impact Risk, Value and Income

What is a real estate mortgage note?
Legally speaking, a mortgage note is two legal documents: 1) A promissory note, and 2) An encumbrance or lien recorded against real estate. But, based on every day conversational usage, most people, lawyers excepted, think of it a one document. To be technically correct in this discussion we will deal with the two separate documents-the promissory note and the mortgage or deed of trust.

To determine the best way to structure a real estate mortgage note we must first consider our goal or our purpose. Remember, we are discussing a “financial instrument” an “investment instrument”. The function of a financial investment is to generate income/cash-flow at the highest rate possible rate commensurate with the risks involved. We will assume the investing goal provides at least a market rate of income, recognizing the risks involved.

5 Key Factors Impacting the Fair Market Value of a Real Estate Mortgage Note

1. Borrower/Debtor
2. Interest Rate
3. Payments & Terms
4. Collateral Security
5. Document Language

Borrower/Debtor
Always deal with a borrower that has good credit. A person’s FICO (credit score) shows how reliable they are in paying off debts-keeping their promises. Avoid buyers who object to having their credit history pulled; there is a reason they want it kept confidential. Don’t take their word for their past paying history, do a credit check.

Interest Rate
The interest rate should be reasonable and fair to both parties; it should reflect the market rate for the mortgage loan with an appropriate adjustment for risk factors. Over charging can lead to hard feelings, inability to make the payments and possibly violating the usury laws of the state. Undercharging devalues the loan and renders it a poor investment.

Payments & Term
The periodic payment should be within the budget of the borrower; the payments should be monthly; the term of the loan should be less than five years, three years is better; avoid making long-term loans. A note with a 3-year term is more valuable than one with a 15-year term. The longer-term notes are discounted much more to account for the longer waiting period.

Collateral Security
Obtain a substantial down payment; keep the loan balance at or below 75% of the value of the collateral real estate. The down payment amount reflects on a borrower’s financial stability. The higher the loan-to-value (LTV), the more risk there is to the investor. Use real estate as the collateral security backing-up the bower’s promise to repay. Be certain to evaluate the condition and location of the property used as security. The mortgage or deed of trust documents collateralizing the promissory note should be recorded in first position; it should be a first position mortgage loan.

If you are structuring a business promissory note, its value will be much greater and it will have less risk if the real estate of the business is part of the note’s collateral security. This means that companies that lease property face bigger financing discounts, unless other real estate is used as security.

Documents and Language
Preparing the mortgage loan documents yourself is high risk folly; it may seem simple and easy to do, but it is not either if it is done correctly; you may save some money on the front end, but you will give the savings back plus way more on the back end. On the internet you will find hundreds of ads and offers proclaiming “free promissory note forms”, “free tips”, and the answers to legal questions “free”. Don’t take the bait! Only an experienced promissory note specialist who really understands the legal and practical meaning of the terms and conditions can keep you safe; each state has different laws and customs. There are state laws and federal laws to be considered.

The Top Notch Real Estate Companies India

The booming property market of India proves the rapid growth of the real estate companies India. The realty companies of India are involved in varied activities ranging from infrastructure development, residential complex, commercial real estate to retail space development.

The favorable government policies are one of the major reasons behind the growing real estate companies India. The government approves of 100 % FDI encouraging people from all across the globe to invest in India. Let us take a look at few of the major real estate companies.

Major Real Estate Companies India

Ambuja Realty Group The company is a joint venture organization between Ambuja Housing and Urban Infrastructure Company Limited and West Bengal Housing Board. The objective of the company is to develop affordable homes with strong base and close nature.

DLF The developer is considered to the be biggest builders of India. The first project developed by the company was on the very heart of Delhi. It is a trend setter in the industry. Much of the credit for changing Gurgaon urban landscape goes to DLF.

Sun City Projects It is one of the leading companies in India. The company has till date involved into variety of projects ranging from group housing to townships to luxury apartments, shopping malls, complexes for office to amusement parks.

Merlin Group For the past three decades the company is active in the real estate sector. The builder has successfully developed townships, office buildings, shopping malls, clubs and office buildings in many cities like Kolkata, Ahmedabad and many such.

Mittal Builders The company has been into the real estate industry for the past 5 years. Unlike its counterparts, the main agenda of the company is to develop real estates. It has successfully carried out its development activities in cities like Mumbai, Bangalore, Pune, Secunderabad, Nagpur and many others.

K Raheja Constructions The construction company ranks among top 10 realtors of India. It was honored with Best Construction & Real Estate Sector Implementation. Raheja has built many projects in cities like NCR, Mumbai, Pune, Chennai, Bangalore and many such.

There are numerous other real estate companies India that are coming up with innovative commercial and residential projects, changing our very form of living.

Knowing A Bit More About Wholesale Real Estate Investing

Among the simplest ways to get in the real estate business is via wholesale real estate investing. It simply requires you to seek out a less expensive property for sale and look for a buyer who is willing to buy it immediately. This would grant you a quick profit the second the sale is done.

Whether you are considering wholesale real estate investing a business or perhaps just a temporary means to earn cash quick, take some time to get to know the strategy first. Understand that there are positive aspects as well as disadvantages in this method. It is essential that you are aware of all these so you can make a practical choice that you wouldn’t feel sorry about afterwards.

There are lots of advantages of wholesale real estate investing. It does not involve a great deal of money and it does not necessitate that you possess certificates or special degrees. Since wholesale lets you market properties right away, you can do it even with very little cash on hand.

This strategy is considered extremely low risk. There is not any threat in losing much money since the wholesaler doesn’t have to purchase the property. He creates an offer to buy it at a given price and when the seller agrees, he makes it under contract.

The wholesaler appears with the funds either by himself or from another party. In this case, if he’s got a readily available buyer then he doesn’t need to shell out cash. If ever the wholesaler ceases to come up with the cash at the agreed time, the contract will just be nullified. There aren’t any legal effects on that case.

In addition, wholesale doesn’t require you to reconstruct or maintain the property. You do not have management work to accomplish. Every deal is a one-time transaction that is fast and provides swift profit.

However, there are a few downsides you have to consider. The first one on your list is that if you’ve no ready buyers available, then you ought to hold on to the property much longer. That way, you lose a bit more profit.

It is also quite possible to purchase a property and then discover in the end that you need to spend more money on repairs, hence reducing your profit. That being said, it’s extremely important to check out the property very well prior to choosing to buy it.

Once you have weighed the benefits and drawbacks of wholesale real estate investing, the decision is yours to make. If or when you decide to embark on this kind of business venture, make sure you’re well prepared for everything that could happen. Do not forget, be a wise investor and gain profit rather than lose it.

Indian Real Estate Market Problems And Prospects

India is a very large country of South Asia, the second most populous country in the world and the seventh largest by extension. The Indian continent from many centuries has been well known for its rich culture and commerce. To make your real estate investment more and more beneficial for you in this country, you need to rely on a network with a lot of real estate experience. Through an operating platform of a realtor investment becomes easier and safer for you as the firm helps to find the property in India.

The real estate market in India is undoubtedly growing local demand for housing space and office incredibly intense, but the market has to be regarded as emerging market for investors because the laws concerning foreign direct investment in the real estate market in India are so restrictive that the benefit of the real estate sector of India is far from straightforward.

This article is an attempt to combine some of the facts and figures which we hope will help anyone who joined the business of Indian real estate. There were changes made to the public good laws concerning foreign direct investment in the back of the real estate sector in February 2005 now mean that the Indians passersby (most commonly designated NRIs) and companies Overseas (CBOs for short) can invest up to 100% in the housing sector.

The government of India also has some rules in place that allow foreign investors to buy commercial property in India. if these properties are to be used by the company for business purposes. Most of the projects where FDI is allowed in a loop period of the investment of a minimum of 3 years to prevent speculative investment, but the good news for companies or NRIs who want to achieve in the real estate market of investment in India is that investment in smaller projects is now a real possibility. Before the IDF is allowed only in projects on sites larger than 100 acres, this was reduced to 25 acres. For individuals who wish to incorporate the real estate market in India is the easiest way to buy into an investment fund.

Changes to laws relating to FDI and the real estate industry in general that were announced back in 2005 rules of the investment fund of the Sierra relaxed to the point where many experts believe a sector of the investment company of real estate (REIT) could now emerge.

Meanwhile there are a number of attractive and transparent funds available from reputable investment houses that do not prohibit individuals hassle free entry into the real estate market in India. In terms of state of the real estate market in India in general and Mumbai property in particular care must be taken when acquiring any land or real estate because the fact of registration of title is not updated and independent legal advice should be taken at each stage of the process that buying property in India.

If anyone has a definitive guide to the process to purchase real estate in Mumbai, he/ she can maximize the benefits to the maximum. But a proper professional guideline is necessary before any investment.

Suresh Nanda – Attaining Spirituality

It is only before the Divine Deity that you will notice devotees worshipping with utmost faith and sincerity. However, in the real meaning of spirituality, it is not about falling prostrate before your Deity to show your obeisance, but it is how you discover your own divine essence within yourself that stands as the intermediary bridge between God and our minds. Suresh Nanda could just be one of those to realize his soul within. In reality, the mind can easily take the ascendant and lead a God-seeker astray.

What Suresh Nanda meant by being led astray is synonymous with materialistic desire and the fact that our casualness and the mental state of our consciousness have taken precedence over our emotional state and especially our soul. What Nanda stresses upon is that the soul is our true self, while our mind and our emotions are mere faculties that are given us to help serve the universal source of freedom, and to also assist to discover the divine essence that is implanted deep within us, which is the biggest distinction between the path of the universal mind power and spiritual truth. It is the path of truth that adorns the soul, and path of the mind that adorns the intellectual consciousness.

The self-mastery path of attaining precedence is in the complete pursuit of spirituality of which the first step is self-realization, wherein our soul is being realized that it is first cause which was created by the Supreme Deity, and is identical to Him in every way. Spiritual realization transpires the subsequent that instils oneness of all life and paths. Moreover, it also overrides the realization that the essence of the Divine creates, sustains, and directs all life on earth. This holds true to all living beings.

The next step to attaining the master-path is God-Realization. This is the reality that mere words can never convey. The realisation of God is the essence of all spirituality, and is the exclusive reason why our soul is the driving force of our human body since the dawn of creation of life on earth. Spiritual endeavours are valid and should be viewed critically, for each and every path has their own distinct value that they bequeath upon a traveling soul.

We all are aware of the thought that the soul lives on even after it has left the human body. It is synonymous with eternity and has been tutored by varied forms of spiritual instruction. The only struggle lies in unfolding your latent spiritual energy that stays in the refusal of our minds to allow the soul to influence. The mind wants to control, despite the fact that the divine purpose is to realize that the soul is the inherent catalyst of God and not the mind. Hence, to transcend the irrationality of our mind, the karma of the individual needs to penetrate and resolve to differentiate between the real essence of the soul and the universal power of the mind.

About Suresh Nanda

Suresh Nanda is a businessman and blog, article writer. If you want to know Suresh Nanda visit the hyperlinks.